Two Caribbean governments increasing travel taxes

Posted On: Thursday, 07 June 2012

BRIDGETOWN, Barbados, Thursday June 7, 2012 – Even as Caribbean governments and tourism officials have lamented the negative impact from of higher travel taxes and duties imposed in overseas source markets, two island authorities are introducing new travel taxes.

The government of Jamaica announced yesterday (June 6) that an agreement has been reached between the Jamaica Hotel and Tourist Association (JHTA) and the government on tax measures to be imposed on the tourism sector under the 2012-2013 Budget.

The agreement will see the introduction of a US$ 20 fee for each arriving passenger, whose trip originates abroad, as of August 1, 2012. Effective September 1, 2012 an accommodation tax will be introduced for each occupied room per night of US$ 1 for properties with less than 51 rooms, US$ 2 for hotels with 51-100 rooms, and US$4 for hotels with 101 rooms and above.

This news follows on the heels of last week’s announcement coming out of Antigua and Barnuda that the government had presented and passed the Airport Administration Charge Act, 2012, which now takes the Antigua’s overall airport taxes to US $93.75 up from US $63.75, and will be built into the cost of travellers’ tickets.

This move was strongly condemned in March by the International Air Transport Association (IATA), which reportedly wrote a strongly worded letter to Civil Aviation and Culture Minister John Maginley stating that the new taxes would stand at a level that far exceeded the regional average and stood well beyond a viable level for airlines.

The IATA Assistant Director of Government & Infrastructure Affairs Cyriel Kronenburg, is said to have stated in the letter that: “plans for yet another major increase in costs to passengers will seriously damage the ability of airlines serving Antigua & Barbuda to operate in a profitable manner, and will surpass any revenue growth for the airport and will damage the health of Antigua & Barbuda’s economy and tourism sector.”

However, the Antigua and Barbuda government remained undeterred and following last Wednesday’s passage of the act, it has mounted a strong defence of the move. Prime Minister Baldwin Spencer described the new tax measure as reasonable and fair while brushing aside suggestions that the move would bring irrevocable harm to the country’s tourism industry.

“Even if it does initially, that is not going to be sustained over time. There might be an initial reaction but Antigua & Barbuda is a destination that sells itself,” Spencer is reported to have said.

The prime minister said the airport needed to be in a position where it could effectively pay for itself in the long term and the improvements to the airport terminal came at a price.

“People would know that if they want a modern airport with all the amenities, then the money has to come from somewhere. We have taken the view to be reasonable and fair with this,” Spence is quoted as saying.

“I am convinced that these measures provide a win-win situation as they will ensure that we meet our revenue target while protecting our industry especially our small properties. I want to commend the JHTA and other stakeholders who put forward alternative proposals from which we could eventually secure a workable compromise. I also wish to acknowledge the hard work of the technical teams from the Ministry of Tourism and Entertainment and the Ministry of Finance and Planning, who worked tirelessly to ensure the success of this collaborative effort,” said the minister in the press statement issued yesterday.

President of the JHTA, Evelyn Smith, was quoted in the statement as saying that the levels for the new tax measures were arrived at “in a spirit of co-operation” and with the aim to arrive at an outcome that was beneficial to all parties involved.